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Beyond Cash: Assessing Externality and Behaviour Effects of Non-Experimental Cash Transfers

Author

Listed:
  • Rafael Perez Ribas
  • Fabio Veras Soares
  • Clarissa Teixeira
  • Elydia Silva
  • Guilherme Hirata

Abstract

In this paper we propose a method to estimate externality effects in cash transfer programmes, even in cases when the benefit is not randomly assigned. Externality is assessed through the decomposition of the average treatment effect on the treated (ATT) into participation (direct) effect and externality (indirect) effect. We also suggest a nonparametric decomposition to investigate whether changes in household outcomes are caused by the income transfer itself or by the other non-monetary components of the programme, such as conditionalities and family support services. We apply all these decompositions on the effect of a conditional cash transfer (CCT) programme on household consumption and savings in Paraguay. This was possible because of the presence of two distinct comparison groups, one within the village and potentially exposed to the externality, and another in a different village not affected by the programme. Furthermore, the evaluation survey collected information on both income and consumption. The results indicate that the programme has a small impact on consumption and a considerable impact on savings. In the absence of externality, however, the programme would have a higher effect on consumption, mostly associated with the cash transfer, and a lower effect on savings. Moreover, the impact on the pattern of consumption is significantly related to a substitution effect and is not related to the increase in income.

Suggested Citation

  • Rafael Perez Ribas & Fabio Veras Soares & Clarissa Teixeira & Elydia Silva & Guilherme Hirata, 2011. "Beyond Cash: Assessing Externality and Behaviour Effects of Non-Experimental Cash Transfers," Working Papers PIERI 2011-18, PEP-PIERI.
  • Handle: RePEc:lvl:piercr:2011-18
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    Cited by:

    1. Luisa Natali & Sudhanshu Handa & Amber Peterman & David Seidenfeld & Gelson Tembo & UNICEF Office of Research - Innocenti, 2016. "Making Money Work: Unconditional cash transfers allow women to save and re-invest in rural Zambia," Papers inwopa827, Innocenti Working Papers.
    2. Clarissa Gondim Teixeira & Fabio Veras Soares & Elydia Silva & Guilherme Issamu Hirata, "undated". "How Effective are the Non-monetary Components of CCT Programs?," One Pager 129, International Policy Centre for Inclusive Growth.
    3. Clarissa Gondim Teixeira & Fabio Veras Soares & Elydia Silva & Guilherme Issamu Hirata, "undated". "¿Qué tan Eficaces son los Componentes no Monetarios de los Programas de Transferencias Condicionadas: El Caso del Piloto de Tekopora?," One Pager Spanish 129, International Policy Centre for Inclusive Growth.
    4. Melba V. Tutor, 2014. "The impact of the PhilippinesÕ conditional cash transfer program on consumption," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 51(1), pages 117-161, June.

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    More about this item

    Keywords

    Externality; Income effect; Behaviour effect; Conditional cash transfer;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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